U.S.-born "Barbie" drug lord takes on Mexican army

MEXICO CITY (Reuters) - A U.S.-born drug lord nicknamed "La Barbie" for his blond hair and blue eyes is battling for control of a major Mexican drug cartel, driving fresh bloodshed in Mexico's brutal war on traffickers.

Edgar Valdez, a Mexican-American born in Laredo, Texas, is a powerful contender to lead the Beltran Leyva cartel since soldiers killed former boss Arturo Beltran Leyva in December, triggering a power struggle within his organization.

The cartel is now divided between an armed wing united under Valdez and Beltran Leyva family loyalists grouped under Arturo's brother Hector, security experts say.

Unlike most traffickers, who are born into poverty, Valdez hails from a middle-class family on the Texan border. He played American football at school, became bilingual and developed a taste for luxury cars, nightclubs and Versace clothes.

After years selling marijuana in the United States Valdez, 37, grew close to Mexico's most-wanted drug lord fugitive Joaquin "Shorty" Guzman but later split with him to join the Beltran Leyva brothers, who also fell out with Guzman.

Passing himself off as a U.S. businessman, Valdez worked as a lieutenant for the Beltran Leyvas, moving from northern Mexico to the southern beach resort Acapulco, where the gang brings in Colombian cocaine to smuggle up to the U.S. border.

He won respect from fellow traffickers by taking on the brutal "Zetas" gang from northeastern Mexico who also want control of routes up from the Pacific and appeared in a 2005 video on the You Tube website interrogating four Zeta hitmen.

Indicted in Texas and Louisiana and with a $2 million bounty on his head in the United States, Valdez once tried to justify his killings of Zetas in a letter to a Mexican newspaper. "I don't pretend to be as pure as a dove, nor clean up my image, but I am sure of what I have done," Valdez wrote.

FROM HITMAN TO KINGPIN

When elite troops sprayed bullets into Arturo Beltran Leyva in a luxury apartment in a colonial city near Mexico City, President Felipe Calderon's biggest drug war strike yet, Valdez saw his chance to massively increase his power.

Calderon has made weakening drug cartels his top priority, rolling out tens of thousands of troops to flashpoints across Mexico with U.S. support. But escalating violence is putting some tourists off visiting Mexico, prompting some businesses to freeze factory investment and alarming the United States.

Despite being described by the U.S. Department of State of having been Arturo Beltran Leyva's "most trusted lieutenant and hitman," Valdez has so far been unable to take over leadership of the Beltran Leyva cartel, sparking a bitter war.

"Though Valdez was Arturo's closest confidant and the top cartel enforcer, it was decided to keep the top spot within the family," U.S. security consultant Stratfor said in a report.

"Power was handed over to Hector, the last remaining living, non-incarcerated Beltran Leyva brother," it said.

The rift has muddied the success of Calderon's strike on the cartel as the violence between the rival factions spills over into Acapulco. Hitmen now shoot at rivals on the hotel strip in a battle for control of the port city, once a luxury getaway for Hollywood film stars and still a popular resort.

Cuernavaca, a leafy weekend retreat for Mexico City residents and part of the Beltran Leyvas' extensive turf, has also seen a surge in killings. Hitmen have strung bodies from road bridges or dumped them by the highway from the capital.

Mexican media has speculated that Valdez has rekindled old ties with Guzman and his Sinaloa cartel on the Pacific to take on Hector Beltran Leyva to finally win control of the cartel.

But continued shootouts, including one in broad daylight on Acapulco's main strip in April that killed six people, suggest his war is still not yet won.

(Writing by Robin Emmott; Editing by Catherine Bremer and Cynthia Osterman)